Section 502 Guaranteed Rural Housing Loan Program

Usda direct loan vs usda guaranteed loans.

Section 502 guaranteed rural housing loan program. Department of agriculture 502 loan is a federally guaranteed loan designed to encourage home ownership in rural areas. Single family housing income eligibility. Also known as the section 502 direct loan program this program assists low and very low income applicants obtain decent safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant s repayment ability.

Program basics the section 502 guaranteed rural housing loan program is designed to serve rural residents who have a steady low or modest income and yet are unable to obtain adequate housing through conventional financing. These loans enable low and moderate income rural residents to acquire modestly priced housing for their own use as a. Purpose the section 502 guaranteed rural housing loan program is designed to serve rural residents who have a steady low or modest.

7 cfr part 3555 this part sets forth policies for the single family housing guaranteed loan program sfhglp administered by usda rural development. Despite the program s success demand for the rural housing outpaces supply. What governs this program.

The rural development loans is also sometimes called a section 502 loan which refers to section 502 h of the housing act of 1949 which makes the program possible. Usda guaranteed home loans. You qualify for the usda 502 home loan program by meeting the.

Section 502 is the single most cost effective federal housing program. The most common among these are the guaranteed loans and direct loans. Under the section 502 guaranteed rural housing loan program the government guarantees mortgage loans made by commercial lenders enabling low and moderate income rural residents to purchase modestly priced homes.

The usda created both loan programs to boost homeownership in rural and suburban areas. Many don t realize that there are two types of section 502 single family rural housing loans and mistake the usda single family direct loan with the single family guaranteed loan. It addresses the requirements of section 502 h of the housing act of 1949 as amended and includes policies regarding originating servicing holding and liquidating sfhglp loans.